Ghanaian President Nana Akufo-Addo has broken ground on the construction of a 300,000 barrel-per-day oil refinery that the government hopes will turn the West African country into the regions petroleum hub.

However, it is perceived that the move is to rival Nigeria which is expected to become a petroleum products supply hub when all its refineries, with a capacity of over 1 million barrels per day come online.

Ghana, the worlds second biggest cocoa producer, became an oil producer in 2010. Output is currently around 132,000 bpd of crude oil and about 325 million standard cubic feet per day of natural gas, Reuters reported.

The project promises to be a cornerstone of our nations development, Akufo-Addo said at the site of the project in the southwestern city of Jomoro, which will also include petrochemical plants.

Phase one of the project, estimated to cost $12 billion, will be funded and constructed by a consortium of Touchstone Capital Group Holdings, UIC Energy Ghana, China Wuhan Engineering Co., and China Construction Third Engineering Bureau Co, he said on state-owned Ghana Television (GTV).

West Africa consumes about 800,000 bpd, according to the African Refiners and Distributors Association, of which almost 90 per cent is imported.

The petroleum hub aims to supply enough refined and by-products to supply the region by 2036, according to an agreement signed in June 2018. However, not everyone is convinced by the plan, however.

Bright Simons, a vice president at Accra-based think tank, IMANI Africa, said the consortium behind the project is not primed for investment (and) the project has no bankable business plan.

Our position is that this is a speculative attempt to grab a landbank for cheap, he said.

Some residents of the hubs proposed 20,000-acre site have protested the plans, demanding the projects footprint be reduced to 5,000 acres.

Oliver Barker-Vormawor, a senior partner of the law firm representing some affected farmer cooperatives, said his clients would not stand down.

The abrasive manner that the government is proceeding discounts valid concerns around the social and environmental impact of the project, the livelihoods at risk by the displacement of farmers and the unsettled questions of ownership and community land rights.

The government has so far rejected these concerns, citing petitions from other residents in support of the project. (THISDAY)